Silicon Valley startup Wealthfront grew by a stunning 450% last year, and according to new Chief Executive Adam Nash, its assets under management are about to hit $700 million.

Yet, some people in the venture capital community are worried about the mobile personal finance company’s ability to make money, the irony of which does not escape them. That’s because the company, which specializes in algorithm-driven wealth management for twentysomethings, only charges a ridiculously low one quarter of 1% in fees and focuses on a narrow customer base.

“It does strike me as difficult to sustain, especially when you’re not charging anything,” said Elliot Weissbluth founder and CEO of $25 billion wealth management firm HighTower Advisors, referencing the fact that Wealthfront accounts under $10,000 are free to manage, and anything over that comes with a 25 basis-point fee. “And 25 basis points does not leave a lot of room for having anything but a piece of software.”

Launched in 2008, Wealthfront, part of a peer group of companies known as “roboadvisories” that includes Betterment, Personal Capital, SigFig and LearnVest, just raised $20 million in its second round of venture capital fundraising and is about to going out for another round later this year, according to a venture capital source familiar with Wealthfront’s financing. (Its first was led by powerhouse investor Marc Andreessen.) It has roughly 7,500 users with accounts ranging from a minimum of $5,000 up to $8 million, with an average account balance of $91,000, Nash said. And its assets under management put it at the front of the pack of mobile personal finance services. This success has come, in part, from the fact that Wealthfront differentiates itself from its competitors by offering tax services in addition to investment guidance.

“The whole idea behind Wealthfront is to take a lot of the best [financial] academic research and put it into software so that it’s cheap enough for everybody to have it,” said Nash, who recently moved into the CEO position at Wealthfront from his role as chief operating officer, replacing Andy Rachleff, who moved into an executive chairmanship. “This is really about millennials. This is about young people. They have a different perspective on investing than the baby boomer generation, they’ve been through two market crashes, they don’t believe in beating the market, they think that’s kind of a scam. They’re really really averse to fees.”

Nash says Wealthfront is able to charge such low fees because its savings advice is disseminated by machine instead of man. The cost benefit of running software and coming up with algorithms instead of hiring people works to Wealthfront’s advantage.

“I’m very comfortable with our economics, the cost of adding a new client is incredibly low, the value is incredibly high,” Nash said. “We think we’re building [a] once-in-a-generation company here in Wealthfront, but we’re doing it for millennials, and this generation is bigger than people think. It’s 90 million with a liquid net worth already of $1 trillion in the U.S. and that will grow to $7 trillion in 2025, so this is not a short-term company. For us, a $100,000 account is about $20 per month. But for a software company $20 per month is a great subscription.”

Critics contend that Wealthfront is relying too much on machines instead of human experience and expertise.

“They’re trying to drive portfolio decisions based on algorithms and not human beings,” Weissbluth said. “There is some potential, but I think it’s still undetermined whether or not people will trust a computer over a human being. Over time computers will play an increased role, but for especially for complex situations, people will still need a human being.”

But Nash argues the Wealthfront’s model of computer over physical advisor plays directly into the hands of the young adults the company is targeting because of the generation’s comfort and preference for a mobile platform.

“Younger people grew up with computers,” Nash said. “If you look at our client base, you’ll see that most of them are not from Silicon Valley and 58% are under 35, and 88% are under 50, and so fundamentally this is really about young people, and the great thing about young people is that when they find something they like, they talk about it, and that’s been really successful for us.”

As for Wealthfront capturing a significant portion of traditional investment advisory business, neither side is worried. Some financial advisors like Doug Wolford, president and CEO of Convergent Wealth Advisors, even use the service and see it as having great potential to service an underserved market’s financial needs.

“I think it’s capturing a segment completely different from the traditional advisory segment, it’s a different demographic and a different mentality,” Wolford said. I keep money there because I like to see how things work. To me anything that focuses people on being responsible for building financial independence is very valuable. If robo-advisers are capturing a younger demographic and getting tech advisers interested in accumulating wealth, I’m all for it. I think these guys are on to something.”